What Is Lease Land and What Should I Know About It?
Learn About Lease Land from the Team at Rio Del Sol
Lease land means you own the home but lease the land it sits on. Instead of purchasing both the property and the lot, you pay a long-term land lease to the landowner, which is often a community or private entity. This structure is common in certain luxury home communities and planned developments—as well as in certain areas of the U.S. like the Coachella Valley, where residential properties sit on Indian-owned lease land.
Understanding how lease land works is part of making an informed decision about your new home investment. At the Villages at Rio Del Sol, a Palm Springs area private community, this format allows buyers to enjoy beautifully designed homes in a private community while keeping the upfront home purchase more accessible.
How Does Lease Land Work?
In a traditional real estate purchase, buyers own both the structure and the land. With lease land, the land remains under separate ownership and homeowners pay a monthly or annual long term lease fee for the right to use it. The home itself is owned by the buyer and can be sold, improved, or refinanced, subject to the lease terms
Lease agreements are long-term, often spanning decades. These contracts outline:
- Length of the lease
- Monthly land lease payments
- Scheduled increases (if applicable)
- Renewal terms
- Responsibilities of both parties
Lease agreements at the Villages at Rio Del Sol are structured as long-term contracts run through 2071. An affordable monthly fee that can increase 5% every year, every five years provides stability and predictability.
Why Do Some Communities Use Lease Land?
Lease land can make homeownership more accessible in high-demand areas, as in many Palm Springs area private Communities. Because buyers are not purchasing the land outright, the initial purchase price of the home is typically lower than comparable fee-simple properties. This structure allows communities in desirable locations to offer luxury homes at more attainable price points while maintaining long-term land stewardship. In markets where land values are significant, lease land can provide flexibility without sacrificing lifestyle or quality.
Some land in the United States is lease land due to historical land allotments with indigenous tribes. In the Coachella Valley, much of the lease land is owned by the Agua Caliente Band of Cahuilla Indians Tribe and administered by the Bureau of Indian Affairs.
What Financial Considerations Should I Be Aware of with Lease land?
Buyers should evaluate lease land property the same way they would any real estate investment, including reviewing long-term costs, resale potential, and financing terms. Important factors to consider include:
- Current land lease amount
- Scheduled increases over time
- Remaining lease term
- Impact on resale value
- Lender requirements
Many lenders finance lease land properties, though terms may vary. Reviewing the lease agreement carefully and working with experienced real estate professionals ensures clarity before closing.
Are There Benefits to Lease Land?
For many homeowners, the primary advantage is value. Lower purchase prices can allow buyers to enter luxury home communities that may otherwise be out of reach. Additional benefits may include:
- Access to premium locations
- Established community amenities
- Professionally maintained surroundings
- Predictable lease structures
When structured responsibly, lease land communities offer stability and long-term planning comparable to traditional ownership.
Is Lease Land Right for You?
Lease land is not better or worse than traditional ownership, but simply a different model. The right choice depends on financial goals, long-term plans, and personal preference.
Buyers who value location, community design, and lower upfront costs often find lease land to be a practical solution. Those focused on owning land outright may prefer fee-simple property. Understanding the terms upfront is what matters most.
Explore Your Options at The Villages at Rio Del Sol
At the Villages at Rio Del Sol, our team helps buyers clearly understand every aspect of ownership, including how lease land works. If you are exploring new homes within a Palm Springs area private community and want straightforward guidance, we invite you to connect with us.
View available homes or schedule a private tour to learn more about lease land near Palm Springs at The Villages at Rio Del Sol.
